A minimum annual household income of $126,400 is required to qualify to buy a house in San Diego, more than double the $54,800 needed nationwide, a new study says.
“Furthermore, only 29% of households here can afford to purchase a median priced home compared to 31% in California and 56% nationwide (as of Q3 2019),” said Larry Cambra, director of brokerage in San Diego for Cushman & Wakefield, an international commercial real estate company.
He said San Diego rents are also rising while demand for less costly multifamily dwellings — including condominiums and rental units in apartment buildings near public transportation — is growing.
Those findings are part of a 14-page population study released Tuesday.
San Diego County, the second most populous in California with over 3.4 million residents, is heavily composed of younger people (39 or under) who comprise more than 1.86 million residents or 59% of local population, the study found.
“Millennials (25-39) are a large and critical group who also make up the largest working age generation in San Diego, representing 24% or 798,000 of the total population compared to 21% nationwide or 67.7 million of the total 328.2 million people,” said Jolanta Campion, local director of research for the company.
She said San Diego ranks seventh nationally as having the highest concentration of millennials when compared to total population living in the metro area. Austin, Texas, is No. 1, with 26% being millennials.
About 39% of San Diegans 25 and older also have a bachelor’s degree or higher education compared to 34% in California and 32% nationwide, she said.
“This bodes very well in helping to produce a highly skilled and talented workforce able to grow and advance our innovation, while also keeping San Diego very competitive with other leading cities around the world — especially when combined with our amazing climate and amenity base,” she said in a statement.
Cambra said San Diego’s population has grown at an average rate of 0.6% the past five years and is projected to remain on that same path the next five.
Meanwhile, San Diego’s overall population is forecast to grow 9% or 335,000 people over the next decade with most of that growth projected to be added to the North City (73,850 people), Central (67,000 people) and East Suburban (57,700 people) submarkets.
“However, like many areas in California, housing affordability remains an issue of crises in San Diego, and is among the main factors population growth figures are not more robust,” he said.
On the bright side, Cambra said, “positive momentum” exists across the board given to addressing these issues and more housing stock appears on the horizon that should help alleviate some pricing issues.
Besides its own data, Cushman & Wakefield draws on these sources: Moody’s economy.com, state Department of Finance, SANDAG, San Diego Association of Realtors, the state Employment Development Department, MarketPointe Realty, Experian, the federal Census Bureau’s American Community Survey and the California Association of Realtors.